Money News
City watchdog, the Financial Services Authority (FSA), has fined GE Capital Bank Ltd (GECB) £610,000 for failing to have adequate systems and controls for selling insurance, which includes Payment Protection Insurance (PPI) and for failing to treat its customers fairly.
GECB's main business is providing credit finance through store cards, credit cards and sales finance. The store cards are usually branded in the name of the retailers (who are appointed representatives of GECB) and the insurance is usually offered to customers at the till when they are applying for a store card. If not bought at the till, customers are contacted later by GECB's telesales staff.
At any one time, approximately 300,000 retail assistants employed by the stores are permitted to sell insurance on behalf of GECB. In 2005 alone, over 850,000 policies, which included PPI, were sold on its behalf.
The FSA found that GECB failed to review and amend its procedures for selling insurance in light of its own evidence, emerging from Q2 2005, of widespread non-compliant selling practices.
GECB is continuing to carry out a remedial action programme to review and improve its systems and controls. To reduce the risk that customers may have lost out GECB is carrying out a comprehensive customer contact exercise and will pay compensation where appropriate. In this particular case the financial impact on most customers was likely to have been modest.
30 January 2007 © Moneyextra.com
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